China's investment environment constantly improves
China has lifted certain controls on the entry of foreign investment and improved the domestic environment of fair competition in recent years.
According to the Ministry of Commerce, a total of 12,159 foreign-funded enterprises were approved from January to May in 2017, up 11.9 percent year-on-year. During the same period, the amount of actually-used foreign investment was US$50.1 billion, down 0.7 percent. Figures show that China's foreign investment inflows keep steady growth.
Given the lackluster global recovery, as well as the spillover effects of the policies of some countries, the stable performance in attracting foreign direct investment is a remarkable achievement.
China's investment environment is constantly being improved, as the number of restrictive measures on foreign capital under government guideline for industries funded by foreign investment has shrunk from 93 in 2015 to the present level of 62.
Meanwhile, the number of industries that foreign funds are barred from investing on the "FTZ Negative List" fell from 193 in 2013 to the present level of 122, with further reductions to come in the future.
To further improve its administration of foreign investment, China has amended four relevant laws, including the Law on Foreign-Funded Enterprises. Foreign investors have no longer been required to apply for administrative approval before investing in the fields permitted by relevant laws and rules since October 2016. They only need to report to the authorities about their investment plans. This reform thus ends the 30-year-old approval system for foreign investment.
In the annual Report on the Work of the Government this year, the central government stressed that foreign-funded enterprises should be treated equally with Chinese enterprises in terms of qualification permission, standard stipulation, government procurement and applying for enjoying industrial policies under the Made in China 2025 initiative.
Earlier this year, the State Council released the Measures on Expanding Opening-up and Utilizing Foreign Capital, including relaxing restrictions on foreign investment in service, manufacturing and mining industries.
In its 2017 report on world investment, the United Nations Conference on Trade and Development listed China as the third most popular destination for FDI in 2016.
According to the report, China attracted US$133.7 billion in 2016, down one percent year-on-year. However, global transnational investment went down in general and FDI going to developing countries in Asia decreased by 15 percent on average. Given this background, China remains an attractive hot land for foreign investment.
Besides, China is attracting more and more enterprises from countries along the routes of the Belt and Road Initiative. Statistics show that investors from these countries founded 781 enterprises in the Chinese mainland in the first quarter of 2017, up 40 percent year-on-year, with a total amount of FDI of US$1.24 billion.
(The author is Feng Qiyu, a reporter with the Economic Daily. This is an excerpt from his article which was first published in Chinese. The translator is Li Yang. )
